CCIFP - Certified Construction Industry Financial Professional Job Costing and Controls Questions and Answers

Question 1

A project manager reviewing a job cost report sees $750,000 in actual costs incurred to date.
The report also shows a signed, open subcontract for $300,000 and an issued purchase order for $75,000 for materials not yet delivered.
What is the total 'cost to date plus committed costs' for this project?

Accepted Answer

D) $1,125,000

Answer

A) $750,000

Answer

B) $825,000

Answer

C) $1,050,000

Question 2

In construction job costing, which of the following best defines 'labor burden'?

Accepted Answer

B) The indirect costs associated with employing labor, such as payroll taxes, workers' compensation insurance, and benefits.

Answer

A) The total direct wages paid to all craft and supervisory labor on a specific job.

Answer

C) The estimated cost of non-productive time, such as rework or weather delays, by the labor force.

Answer

D) The administrative overhead cost of processing the company's entire payroll.

Question 3

What is the primary purpose of a standardized chart of cost codes within a construction company?

Accepted Answer

C) To provide a consistent framework for tracking, reporting, and analyzing project costs across all jobs.

Answer

A) To calculate the overhead allocation rate for the company's general and administrative expenses.

Answer

B) To satisfy the detailed reporting requirements for the Internal Revenue Service (IRS).

Answer

D) To simplify the billing process exclusively for cost-plus contract structures.

Question 4

A fixed-price project has an original contract value of $2,000,000 and an original estimated cost of $1,600,000. The client approves a change order that adds $100,000 to the contract price. The estimated cost to perform this additional work is $70,000. What is the new total estimated gross profit on the project?

Accepted Answer

B) $430,000

Answer

A) $400,000

Answer

C) $470,000

Answer

D) $500,000

Question 5

Which of the following internal controls is most effective in preventing the misallocation of material costs to the wrong job?

Accepted Answer

B) Implementing a system where delivery tickets must specify a valid job number upon arrival at the site and be matched to a coded purchase order before an invoice is paid.

Answer

A) Requiring all high-value purchase orders to be approved by the company president.

Answer

C) Performing a comprehensive physical inventory count at the central warehouse once per year.

Answer

D) Conducting monthly reconciliations of the accounts payable subsidiary ledger to the general ledger.

Question 6

A project's job cost report shows the following: Total Estimated Cost = $5,000,000; Costs Incurred to Date = $2,000,000. The project manager's latest forecast indicates that the project is trending over budget and will require an additional $3,500,000 to complete. What is the project's new 'Estimated Cost at Completion' (EAC)?

Accepted Answer

C) $5,500,000

Answer

A) $3,000,000

Answer

B) $5,000,000

Answer

D) $8,500,000